Pessimism up for business leaders, survey says

BUSINESS CONFIDENCE

A survey of business confidence being issued today finds Bay Area industry leaders more pessimistic in January than at any time since this quarterly report was first published in the fall of 2001.

"Unfortunately, significantly more layoffs and business failures seem inevitable in every industry and every corner of the region," said Jim Wunderman, president of the Bay Area Council, the group that oversaw the quarterly Business Confidence Survey.

A total of 505 business leaders, representing employers of different sizes and industries throughout the nine-county Bay Area, shared their hiring and firing plans as well as their short-term outlooks for the regional economy.

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This is not a random survey, so the results are not hard-and-fast predictions. That said, the outlook is gloomy.

More than 4 out of 10 respondents said they plan to cut jobs during the next six months, with larger companies the most likely to issue pink slips. About half of the business leaders surveyed employ fewer than 50 people and among this group only 1 in 3 plan layoffs.

About 45 percent of the entire group of 505 executives plan to maintain current employment levels and 10 percent said they still expect to hire within the next six months.

Business leaders do not expect the regional economy to rebound quickly. Eight out of 10 respondents said they expect local business conditions to stay bad or get worse within the next six months. Only 20 percent are optimistic things will improve during that time.

"What is clear from the survey data is that businesses and their employees across the Bay Area are suffering," said Lenny Mendonca, a director at McKinsey and Co. and chairman of the council.